Orange County’s largest aerospace and de-fense contractors added more than 1,600 jobs during a 12-month period through May, breaking a five-year streak of employment drops.
The 25 companies on this week’s Business Journal list make parts for commercial and military aircraft and other products. Three are based in OC, while the rest have subsidiary offices and facilities here.
The companies collectively saw a 7.6% increase in local work force, now counting 23,833 workers. Companywide growth for the group stayed virtually unchanged during the same period.
Seven companies added employees, while five made cuts. Four companies have not changed their employee count, and nine others were based on Business Journal estimates.
The list ranks the companies by number of local employees.
Chicago-based Boeing Co. kept its No. 1 spot, with 7,000 employees, unchanged from a year earlier, according to data supplied by the company. The Business Journal had estimated its total last year.
Dominates Data
Its employee count makes up nearly 30% of the overall employment total in the industry here. Boeing is the fourth-largest employer in OC and has operations in Seal Beach, Huntington Beach and Anaheim.
Panasonic Avionics Corp. in Lake Forest climbed four spots to No. 2 as it continued to boost local employment with 1,620 additional employees over the year. The increase marked the largest jump on the list and led the overall growth in the industry.
This week’s list would have reflected a 0.3% uptick in employment without Panasonic Avionics, which operates as part of Osaka, Japan-based Panasonic Corp.
A series of new deals in the past several months might have played a part in the growth of the company. It signed a 10-year, $1 billion contract in November to provide in-flight entertainment systems for Etihad Airways, the flagship carrier of the United Arab Emirates.
The company also is working on providing wireless connection systems and broadband Internet connectivity products for more than 300 planes for Chicago-based United Continental Holdings Inc., as well as for Japan Airlines Co.
Panasonic Avionics switched from using an outside contractor for its in-flight connectivity antennae and brought the work to Lake Forest.
Panasonic’s doubling of its OC segment came while the company made a 10% cut across all its operations. It has 36,170 fewer workers companywide, for a total of 330,767 in its 80 some locations.
No.5 Cherry Aerospace in Santa Ana has added 30 people for a 10% growth. It’s part of Portland, Ore.-based Precision Castparts Corp., which has other operations in Santa Ana, Garden Grove and Irvine.
The Tustin office of Cedar Rapids, Iowa-based Rockwell Collins Inc. slipped to No. 10 despite an increase of 92 workers. It now counts 608 employees here in the company’s media unit, which works on putting together movies, TV programs and music for airlines.
No. 12 U.K.-based Meggitt PLC’s local units combined to grow by nearly 9% from last May and now counts 525 workers between their offices in San Juan Capistrano and Irvine.
Meggitt had cut 184 local workers at one point in the past year, a decline it made up for at a faster clip compared with its companywide growth. The parent company saw a 5% employment growth throughout its 62 locations worldwide and counts 10,000 employees in total, with North America accounting for about 60%.
Platform Upgrades
“We’re trying to focus on upgrading existing platforms,” said Charles Panasewicz, senior vice president at Meggitt Defense Systems Inc. in Irvine. “How we are able to grow in the face of adversity and no budget is somewhat of a miracle. We’ve been able to align ourselves with some programs that are likely to survive impending Pentagon budget cuts.
“There are certain program opportunities out there associated with the upgrading of existing platforms,” Panasewicz said. “Upgrading somehow is less expensive than building something new.”
Meggitt’s management is in the process of bringing its San Juan Capistrano subsidiary, Meggitt Sensing Systems, to Irvine, according to Panasewicz.
“They have their own business model and business plan,” he said. “They’re in a slightly different area than we are. They do commercial, industrial electronics. We do purely defense work.”
No. 23 Eads North America Test and Services, which has an office in Irvine, had the largest percentage drop in work force when it shrank its OC work force by 14% to 140. It upped its companywide total by 9% for a total of 133,000 during the same period.
Cuts
No. 17 Costa Mesa-based Ceradyne Inc. was another company that saw its employee numbers fall. It has cut more than 50 workers in the past year and now has 401 people working locally. Ceradyne makes ceramic-based body armor and other products for the defense, industrial and commercial markets.
Ceradyne was the 35th-largest public company based in Orange County, according to a Business Journal list published in April. Ceradyne’s sales grew 40% last year to $572 million, and its profits jumped almost threefold to $83.9 million.
Bellevue, Wash.-based aerospace supplier Esterline Technologies Corp., which has subsidiaries in Brea, Buena Park and Rancho Santa Margarita, recently reported April-quarter results showing a 16% increase in revenue to $504.8 million. Quarterly profit slipped almost 2% from a year earlier to $45.2 million.
Esterline’s units in OC cut staffing by 43 employees in the past year, to 1,094. The work force total was good for the No. 7 spot on the aerospace and defense contractors list.
The company has been under pressure from San Diego-based investor Relational Investors LLC to improve profitability and capital structure. Relational recently reported it has a 6.6% stake in Esterline.
